Foster member engagement
Consumer interest in relationship loyalty has been high since the programs emerged in 2003, but technology limitations proved restricting. Then came the recession, when most programs were scuttled or suppressed, Plozay says.
The programs have returned as the economy stabilized, just as social media took off, so “this old concept has kind of a new wrapping around it,” she says.
Financial institutions eliminated another hurdle by turning to a consumer-driven model for sign-up.
In the early days of such programs, credit unions had to decipher which groups of people could or would want to be linked, and that “guessing game” held up companies from further developing the programs. Now, both accountholders must confirm they want to be interwoven, and either can unlink their accounts at any time.
“The self-serve tool makes all the difference,” says Matt Flynn, director of client relations for The Members Group.
Authentication remains a primary concern, and credit unions must have controls during the sign-up and redemption processes, including an audit function that allows for reviewing transactions brought into question.
Credit unions can foster engagement by creating “wow” experiences that allow members to drive the interaction. They include:
►Events, which can bring in new members and provide incentives for current members.
►Clubs, which provide calculable benefits in exchange for fees that offset expenses.
“Many of us working in loyalty rewards would not have expected that members would be willing to pay $79 to be part of a club,” Plozay says. “The benefit derived from being part of that—such as free next-day shipping—is significant, so there has to be a value equation there. But that concept around club membership is continuing to grow.”
►Product review via blogs or consumer opinions.
►Games and online connections.
►Self-directed point management, which empowers members to choose their own gifts using the points they earn.
Another recent phenomenon is pooling loyalty points toward a one-time fundraiser for a charity or cause. “That’s something we’ve found a lot of enthusiasm around, especially from the credit union perspective,” Plozay says.
Kelzer’s advice for successful relationship loyalty programs: Develop a comprehensive marketing strategy prior to launch and leverage existing channels, Kelzer says.
Also, design external and internal marketing efforts around encouraging members to engage. Communicate the message frequently and consistently, and monitor your social media channels to maximize the reach of your credit union’s relationship loyalty program.
“There are a lot of different social media outlets,” Kelzer says. “It’s not important to be on all of them, but those that you are on, make sure you do very well and monitor the activity and help shape the conversation. This will bring opportunities for you to better represent your brand and message.”